By a 52-47 party-line vote in the early
hours of Feb. 10, the Senate confirmed Rep. Tom Price (R-Ga.) as Health and
Human Services (HHS) secretary, overcoming objections by Democrats about the
ethics of his stock dealings in health care companies while a member of
Republicans praised Price as an excellent
choice to run HHS at a time the Trump administration is weighing radical
changes to the country’s health care system, transitioning from President Obama’s
Affordable Care Act (ACA) to something new, and not-yet-defined.
Claire McCaskill (D-Mo.) did not vote,
making for the uneven tally.
Price, an orthopedic surgeon by trade, also
raised the hackles of Democrats who said dismantling the ACA, especially
without a Republican replacement plan, would leave up to 30 million Americans
without health insurance. These people had gained coverage under the ACA’s
expansion of eligibility standards for the Medicaid program and individual
But, Republicans said with Price now
confirmed, an ACA replacement strategy and other reforms like block-granting or
capping federal spending on Medicaid would accelerate. The priorities, they
said, would be to put patients first and eliminate inefficiencies and fraud
from the system, often times by providing states more control over the health
Ahead of the Price vote, and again in
seeking to address what Republicans see as inefficiencies in the Medicaid
program, the House Energy and
Commerce Committee’s Health Subcommittee on Feb. 7 approved two pieces of
One bill (HR 829, the Prioritizing the Most Vulnerable Over Lottery Winners
Act of 2017) would tighten Medicaid’s eligibility rules by mandating
that states consider lottery winnings and other lump-sum payments of more than
$80,000 when deciding if someone is eligible for Medicaid.
The second bill (HR 181, the Close Annuity
Loopholes in Medicaid Act) would revise the rules for determining income for
married couples when to gauge if one spouse or the other qualifies for Medicaid
long term care benefits.
Continuing a theme set over the first three
weeks of the Trump administration, Democrats have stressed that the changes
favored by Republicans, beyond the minor pieces of legislation like those
passed on Feb. 7, will do harm to Medicaid recipients, from children to those
in long term care, like skilled nursing care centers. Democrats are
specifically focused on the administration’s avowed goal to block grant, or set
caps on federal funds for states to use on Medicaid.
Adding to the debate, on Feb. 6 Washington,
D.C.-based consultants Avalere Health released
new analysis that found that Medicaid block grants would shrink federal spending
on the program by $150 billion over a five-year period, and per capita caps
would reduce funds by $110 billion over the same time frame.
But the report showed the state-by-state
picture much more cloudy as spending varies widely due to existing eligibility
levels and spending per enrollee. As an example, Avalere said under Medicaid
block grants, North Dakota would experience an increase in federal outlays but
the other remaining states and Washington, D.C., would have their funding cut
between a slight 4 percent to a sharp 62 percent. If per capita caps were
implemented, 24 states would get more federal money and 26 states would see cuts,
the report said.
“The details of how lawmakers structure a
potential Medicaid funding cap (e.g., growth rates, allowances for historical
spending and mechanisms for quality payments) will have a significant impact on
states,” the report said. “For instance, states that spend more per enrollee
will fare worse under per capita caps. States that experience large increases
in enrollment will struggle in a block grant scenario.”
Caroline Pearson, senior vice president for
Avalere, says if these new funding mechanisms are enacted and states lose out
on money without making up for new shortfalls on their own, then long term care
providers could be faced with scores of new elderly Medicaid recipients falling
under the uncompensated care category.
“If there are caps in federal Medicaid
spending, some states could make up funding to preserve what they have now, or
they could scale down services but keep eligibility standards the same by
offering skinnier benefit packages,” she says.
Separate from the block grant and/or cap
debate is what happens to those who obtained Medicaid benefits under the ACA’s
expanded eligibility standards. Pearson says she could see lawmakers maintain
the ACA expansion because governors, many of them Republican, do not want to
dump millions of people off coverage. At the same time, to assuage political
concerns, Congress could at the same time approve block grants and caps to keep
President Trump’s promise on the issue.
There is also a chance states could carve
out funding for long term care in order to avoid uncompensated care problems.
“Long terms care is a reasonable carve out if the states do not have a lot of
options,” Pearson says. But, with spending on elderly Medicaid recipients a
significant portion of state budgets, a carve out could work against the stated
goal of Republicans to control Medicaid spending.
In a separate congressional development, the
Senate Finance Committee has announced that Seema Verna, selected by President
Trump to run the Centers for Medicare & Medicaid Services, will have a
confirmation hearing on Feb. 16. It is almost certain that Verna’s work on
reforming the state of Indiana’s Medicaid program—which Price has called a
model of how states could reshape health coverage for low-income, able-bodied
adults—will be under the microscope during the session.